Talk

Advanced search

is this good perfomance from my stakeholder pension

(12 Posts)
chipauchoc Thu 26-Jan-17 10:53:27

Back in February I received £28,000 of pension in my divorce. I transferred this to a new personal pension to which I have been paying in just £25 in per month. I did a bit of research and invested in 4 funds (with a bit of pot-luck thrown in!).

I logged in to my account today and see that it has grown £6,600 in just under a year. I'm a bit shocked that it's so much to be honest and just wondered if this is fairly standard growth?

kath6144 Thu 26-Jan-17 11:46:34

That is a really good growth 25% ish, well done on picking good funds, but remember past performance is not an indicator of future performance!

You may find the next year's growth is much less, but it is overall growth at your retirement date that matters. How old are you and when do you want to start drawing on the fund?

chipauchoc Thu 26-Jan-17 12:05:16

Oh thanks Kath I'm feeling quite smug about that. Hope it continues, but I'm aware it may not be as good in future years. I'm 43, I have 2 previous employer schemes each of around 10k, so I'll leave them where they are (or should I put in one pot?). I guess I'm planning retirement age around 67. Any advice very much welcome, I'm completely new to all this (ex was an IFA and did all this stuff).

kath6144 Thu 26-Jan-17 13:22:31

What are the employer schemes, are they final salary or money purchase, if latter then you may be better putting all in one pot, but not usually if final salary?

You have loads of time for new scheme to grow, do keep adding to it if you can afford to. Are you in a company pension scheme at the moment?

chipauchoc Thu 26-Jan-17 17:24:13

I'm not sure about the previous staff schemes. Have asked for details so will report back here, if that is OK?
Thank you, that's good news, I'm self employed at the moment, so no staff scheme. I could maybe put away a little bit more a month, which would probably be wise I'm sure.

SadAboutTheBoy Fri 27-Jan-17 13:48:51

That's great news, but please don't assume that this is 'standard growth' and you'll see it grow every year by over 20%!

Did you invest in mostly UK funds or global ones? You may have been lucky because February was a bit of a 'low point' for the UK market over the last 5 years.

Have a look at this chart of the index of the FTSE 100 UK companies - if you'd invested your money in Feb 2015 you wouldn't have seen such a healthy growth...
markets.ft.com/data/indices/tearsheet/summary?s=FTSE:FSI

Generally it's best to 'drip feed' in extra money to avoid the ups and downs of the market.

Are you getting tax relief on your contributions? Your SIPP provider should be claiming them back for you...

chipauchoc Fri 27-Jan-17 14:37:59

Thanks SadBoy - I'll be sure not to expect this kind of return for future years.

I invested 50% in SL Stock Exchange Pension Fund, 30% in SL Ethical PEnsion Fund, 10% in SL Euro Equity Pension Fund and 10% in SLBlackRock UK Equity Tracker.

Just checked on my 2 other staff pension schemes, one with EY which I've left alone for 10 years which received approx 8,000K in contributions and its value now is approx 20k. My other is with Aviva (apparently a defined benefit scheme), and I thought that was at around 8k, but at my request they are sending me a transfer value, all they could tell me was that it was over 30k! (which is a pleasant surprise!). Any suggestions as to what I should do with these (transfer to SL pot or keep where they are) would be really appreciated.

specialsubject Fri 27-Jan-17 17:06:39

stock market very high so all pensions that are trackers are growing hugely. The hard bit is locking it in..

do keep adding but anything you put in now will almost certainly lose value. You have to think long term.

Kazplus2 Sun 29-Jan-17 13:49:13

For your other staff schemes, if there is a GAR attached to them then leave them where they are. If you do consider moving them(say to a SIPP etc.) Then consider exit fees. If above 1pc then wait til new legislation comes in.

kath6144 Sun 29-Jan-17 20:43:07

Defined benefit pots are generally best left alone and I would expect both of them are DBs, being EY as well as Aviva.

I was in my first job for 15mths, mid-eighties, had to leave a tiny amount in the pension (related to contracted out I think) - it has been growing at 9%/annum, and although it will only be a small pension per year, it will be good compared to what I Ieft in!

Second employment, there 5.5yrs, again the predicted pension has grown at a good rate and will pay out at 60, as that was the womens retirement age when I joined the scheme. Again, it will be a reasonable annual pension compared to what I was paid in the employment, even better if I leave it another couple of years after 60.

Am not sure why special said anything you put in now will lose value - it could do, most funds go down as well as up, but if you drip feed money in monthly from now on, you will smooth out the peaks and troughs. So some monthly payments may lose, but others will gain. Over the amount of years you have, they should more than even out and hopefully grow overall.

We have been investing in both stocks and shares ISAs and SIPPs for almost 20yrs, whilst one fund is down overall, that is only because I invested a lump sum in my naivety many years ago - we learnt our lesson and everything is now drip fed. Generally we have had growth, in some cases spectacular, in other cases not.

chipauchoc Mon 30-Jan-17 13:18:18

Thanks Kath. Well I think the DB schemes will give me £1k a year each and the transfer values are around £30k, that doesn't add up to me. So if I retire at 63 , presuming I make it to 93 it would be worth me leaving it where it is. Is it worth taking the transfer values rather than the £1k a year? I'm confused with this (as you can probably tell!)

Sunseed Mon 30-Jan-17 19:53:04

If you have a DB scheme with a transfer value over £30k it is a legal requirement for you to receive advice before moving it, if that is what you choose to do to capture the transfer value. This is because in the DB scheme the provider company bears all the investment risk; if you choose to transfer to a personal pension arrangement you will take on all the investment risk plus you'll be giving up your rights to any Guaranteed Minimum Pension or Guaranteed Annuity Rates or Protected Tax Free cash that may apply. The Regulator doesn't like that.

Unless you have an especially compelling reason to move your DB schemes (e.g. serious scheme funding concerns) then as you're so far away from taking benefits then probably best off leaving them alone until you are closer to retirement age.

Join the discussion

Join the discussion

Registering is free, easy, and means you can join in the discussion, get discounts, win prizes and lots more.

Register now